Daily Briefs

Using data from the close on 15 November, there could be 6 adds and 5 deletes for the Yuanta/P-Shares Taiwan Dividend Plus ETF in December.
There will also be capping and funding flows that will lead to a one-way turnover of 16.9% and a one-way trade of TWD 57.5bn (US$1.77bn).
Short interest is at the highs in most forecast deletes, while the trend is mixed among the potential inclusions.

SF Holding H Share Listing: AH Discount Views

S.F. Holding (002352 CH), the largest Asian integrated logistics service provider, is premarketing an H Share listing to raise US$1.0-1.5 billion, according to press reports.
In SF Holding H Share Listing: Updates Point to Improving Fundamentals, we noted that SF is in good health, with a return to growth, rising margins, and strong cash generation.
In this note, we examine the likely discount SF Holding will offer its H Shares compared to the A Shares.

Malaysia Airports (MAHB MK): A Firm Offer (Finally)

By David Blennerhassett

Talk about cutting it fine. On the pre-conditional long stop date, the Gateway Development Alliance has now made a firm Offer for Malaysia Airports Holdings (MAHB MK) at RM11/share.
The consortium, led by Khazanah Nasional’s subsidiary UEM Group Bhd and EPF, together with the Abu Dhabi Investment Authority and Global Infrastructure Partners, collectively hold 41.22%.
This is a Tender Offer with a 90% acceptance threshold. “The Joint Offerors reserve the right to revise the level of the Acceptance Condition to a lower level“.

Taiwan Top 50 ETF Rebalance Preview: Shippers Sailing Back Into Indices

Wan Hai Lines (2615 TT) and Yang Ming Marine Transport (2609 TT) are currently in contention to be added to the Yuanta/P-Shares Taiwan Top 50 ETF in December.
Passive trackers will need to trade around 0.5x ADV in the inclusions while impact on the forecast deletes is between 0.36-2.2x ADV.
Short interest has decreased and is near the lows for the forecast adds while short interest has been increasing in the forecast deletions.

CiDi IPO Preview: Uniquely Positioned For Growth In Autonomous Mining and Logistics Trucks

By Andrei Zakharov

CiDi, a China’s leading provider of AD technology for commercial vehicles, will tap equity markets in Hong Kong for growth capital.
The autonomous driving company with focus on autonomous mining and logistics trucks, V2X technologies, and high-performance perception solutions, filed its IPO prospectus.
I like CiDi’s leadership position in autonomous mining industry, hyper-growth trajectory and differentiated full-stack autonomous mining solution.

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Nov 18

Daily Brief Health Care: Shanghai Henlius Biotech , SK Bioscience and more

By Smartkarma Daily Briefs | Daily Briefs, Healthcare

In today’s briefing:

Merger Arb Mondays (18 Nov) – Henlius, GAPack, Xingda, Seven & I, Fuji Soft, NEC Networks, Macromill
Appointment of RFK Jr as the US Health Secretary and a Book Review Of “The Real Anthony Fauci”

Merger Arb Mondays (18 Nov) – Henlius, GAPack, Xingda, Seven & I, Fuji Soft, NEC Networks, Macromill

We summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
Highest spreads: Renewable Japan (9522 JP), Shanghai Henlius Biotech (2696 HK), Macromill, Inc (3978 JP), Seven & I Holdings (3382 JP), Canvest Environmental Protection Group (1381 HK).
Lowest spreads: Nec Networks & System Integr (1973 JP), Net One Systems (7518 JP), Avarga Ltd (AVARGA SP), T Gaia Corp (3738 JP), Nishimoto (9260 JP), Elematec Corp (2715 JP).

Appointment of RFK Jr as the US Health Secretary and a Book Review Of “The Real Anthony Fauci”

By Douglas Kim

In this insight, we provide some of the main highlights of the book “The Real Anthony Fauci”, which was written by Robert F. Kennedy Jr. (RFK Jr) in 2021.
We discuss how the appointment of RFK Jr could impact some of the major health care stocks in Korea, especially those that are involved in developing and producing vaccines.
Although the share prices of many Korean vaccines related stocks have declined materially in the past 2-3 years, RFK Jr becoming the next US Health Secretary could pose further headwinds.

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Nov 17

Daily Brief Thematic (Sector/Industry): Who Are Leading the Charge in the RNAissance of Medicine and more

By Smartkarma Daily Briefs | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

Who Are Leading the Charge in the RNAissance of Medicine
APAC Healthcare Weekly (Nov 17)- GenScript Biotech, Eisai, Otsuka, Daiichi Sankyo, Cellid, and Lunit

Who Are Leading the Charge in the RNAissance of Medicine

By Pyari Menon

In this report we analyzed data from technical publications to review leadership in RNA related therapeutics. We have listed the top thirty.
In terms of quantity and quality of innovations Alnylam Pharmaceuticals (ALNY US) and Moderna (MRNA US) are best positioned. Among private companies Senda Biosciences screened well.
Partnerships and acquisitions between RNA startups and big pharma as well as between big pharma and big pharma highlight RNA’s potential versatility, risks and the necessity for RNA related exposure.

APAC Healthcare Weekly (Nov 17)- GenScript Biotech, Eisai, Otsuka, Daiichi Sankyo, Cellid, and Lunit

By Tina Banerjee

GenScript Biotech established operations site and logistics center in Australia. Eisai has received positive opinion from CHMP recommending approval of lecanemab. Otsuka forms JV to boost IV supply in US.
Lunit formed strategic alliance in France to expand AI solution deployment. Daiichi Sankyo and AstraZeneca submitted a new BLA for accelerated approval in the U.S. for datopotamab deruxtecan for NSCLC.
Cellid has completed recruiting and dosing all participants in its Phase 3 clinical trial of COVID-19 vaccine targeting Omicron variant. Alembic Pharmaceutical received FDA approval for hypertension drug.

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Nov 17

Daily Brief Equity Bottom-Up: Sea Ltd (SE US) – Firing Profitability On All Segments and more

By Smartkarma Daily Briefs | Daily Briefs, Equity Bottom-Up

In today’s briefing:

Sea Ltd (SE US) – Firing Profitability On All Segments
[Tencent (700 HK, BUY, TP HK$518) TP Change]: C3Q24 Review: Performance In-Line with Catalysts
2024 High Conviction Update: Asahi Intecc (7747 JP)- Medical Division Drives Q1 Result
GXO Logistics Inc.: Expanding E-Fulfillment Capabilities to Set New Standards! – Major Drivers
Howmet Aerospace Inc.: Capitalizing on Explosive Commercial Aerospace Growth for 2025! – Major Drivers
Toyota Motor Corporation: Their Adaptation & Strategy in the Chinese Market Driving Our ‘Buy’ Rating! – Major Drivers
Cleveland-Cliffs Inc.: Can The Stelco Acquisition Be A Game Changer? – Major Drivers
Cirrus Logic Inc.: Will Its Expansion into Laptop Markets Bring A Shift In The Competitive Dynamics? – Major Drivers
AppLovin Corporation: Expansion into E-commerce As A Strategic Growth Enabler! – Major Drivers
Duolingo Inc.: Leveraging AI & User Engagement For A Competitive Edge! – Major Drivers

Sea Ltd (SE US) – Firing Profitability On All Segments

By Angus Mackintosh

In 3Q2024, Sea Ltd demonstrated its ability to turn a profit at Shopee, whilst booking strong growth, with sales & marketing kept well in check and active users increasing substantially.
E-Commerce registered higher take rates, through higher commissions, more paid advertising, and increasing levels of self-fulfilment through SPX Express, whilst Digital Financial Services saw a rapid acceleration in loan growth.
Digital Entertainment was back on form with strong growth in bookings, active users, ARPU, and adjusted EBITDA. Management remains confident about 4Q2024 and the outlook for 2025.

[Tencent (700 HK, BUY, TP HK$518) TP Change]: C3Q24 Review: Performance In-Line with Catalysts

By Ying Pan

Tencent reported C3Q24 revenue, IFRS operating profit, and IFRS net income in-line, in-line, 11% vs. our estimates and in-line, in-line, 18% vs. consensus.
The bright spot is fintech transaction volume grew 10% YoY showing gain in market share, which coupled with rebound in consumption since October should rive recovery.
We raise TP by 2% to HK$518. Tencent is still our TOP PICK in an uncertain geopolitical environment with an upswing fundamental story.

2024 High Conviction Update: Asahi Intecc (7747 JP)- Medical Division Drives Q1 Result

By Tina Banerjee

Asahi Intecc (7747 JP) recorded 9% YoY revenue growth to ¥31B in Q1FY25. Revenue growth is attributable to the continued strong trajectory of medical division, which reported 10% YoY growth.
Strong rebound in China is key highlight for medical division performance. Revenue from China increased by a whopping 36% YoY and 44% QoQ to a record high of ¥9.3B.
Despite a better-than-expected Q1FY25, the company maintains full-year FY25 guidance, due to external factors such as currency movements as well as uncertainties in trends for net sales, productivity, and expenditure.

GXO Logistics Inc.: Expanding E-Fulfillment Capabilities to Set New Standards! – Major Drivers

GXO Logistics’ latest earnings for the third quarter of 2024 painted a mixed yet informative picture of its financial performance and strategic positioning.
The company reported record revenues of $3.2 billion, marking a substantial year-over-year increase of 28%.
This robust top-line growth is partially attributed to an organic revenue growth of 3%, which has shown a sequential upward trend throughout the fiscal year.

Howmet Aerospace Inc.: Capitalizing on Explosive Commercial Aerospace Growth for 2025! – Major Drivers

Howmet Aerospace’s third quarter 2024 results demonstrate significant performance gains amidst a complex operating environment.
The company’s revenue growth was substantial at 11% year-over-year, with commercial aerospace driving much of this improvement with a 17% increase in revenue.
The engine products and fasteners segments excelled, supported by robust structures performance.

Toyota Motor Corporation: Their Adaptation & Strategy in the Chinese Market Driving Our ‘Buy’ Rating! – Major Drivers

Toyota Motor Corporation has announced its fiscal year 2025 second-quarter financial results.
The company achieved an operating income of JPY 2.4642 trillion for the first half of the fiscal year, which was maintained close to the previous year despite some setbacks in production and increases in expenses.
While sales revenue touched JPY 23.2824 trillion, the net income of JPY 1.9071 trillion saw a significant decrease from the prior year, primarily due to exchange rate fluctuations which caused valuation losses in foreign currency assets.

Cleveland-Cliffs Inc.: Can The Stelco Acquisition Be A Game Changer? – Major Drivers

Cleveland-Cliffs presented its third-quarter 2024 results during a challenging period of weaker steel demand and pricing, largely attributed to reduced automotive production and high interest rates affecting consumer decisions.
The company’s acquisition of Stelco, a Canadian steelmaker, was a notable development during this period, promising operational agility and cost efficiency.Cleveland-Cliffs reported a quarterly adjusted EBITDA of $124 million on 3.8 million tons of shipments.
This was a decline from previous performance levels, which the company attributed to reduced activity in the automotive industry.

Cirrus Logic Inc.: Will Its Expansion into Laptop Markets Bring A Shift In The Competitive Dynamics? – Major Drivers

Cirrus Logic has reported strong financial performance for the second quarter of fiscal year 2025.
The company achieved record revenue and earnings per share, with revenue reaching $541.9 million.
This figure was near the upper end of their guidance range and reflects strong demand for components used in smartphones.

AppLovin Corporation: Expansion into E-commerce As A Strategic Growth Enabler! – Major Drivers

AppLovin’s latest earnings for the third quarter ending September 2024 provides a comprehensive overview of the company’s performance, strategic initiatives, and future growth prospects.
The company reported strong financial metrics with total revenue reaching $1.2 billion, marking a 39% year-over-year increase.
Adjusted EBITDA also rose significantly to $722 million, reflecting a 72% increase from the same period last year, and achieving a 60% adjusted EBITDA margin.

Duolingo Inc.: Leveraging AI & User Engagement For A Competitive Edge! – Major Drivers

Duolingo, a prominent player in the online language learning space, has reported its financial results for the third quarter of 2024, outlining both strengths and areas to watch.
The company demonstrated robust growth in key metrics, including a 54% year-over-year increase in daily active users (DAUs), with its Family Plan onboarding 21% of its subscriber base.
This impressive user growth, particularly after a high growth rate in previous years, suggests that Duolingo continues to successfully engage its expanding user base.

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Nov 17

Daily Brief Event-Driven: HK Connect SOUTHBOUND Flows (To 15 Nov 2024); Tech Bought and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

HK Connect SOUTHBOUND Flows (To 15 Nov 2024); Tech Bought, High-Div SOEs Sold or Ignored, Again
China Healthcare Weekly (Nov.17) – TCM VBP New Updates, CR Boya Completes Acquisition of Green Cross
Weekly Deals Digest (17 Nov) – Seven & I, Fuji Soft, Nishimoto, Macromill, CPMC, KEPCO, SF Holding
FXI Rebalance Preview: One Change in December as Shorts Spike
A/H Premium Tracker (To 15 Nov 2024): AH Premia Rise Sharply; Hs Shellacked Vs As In Most Sectors
Fuji Soft (9749 JP): KKR Bumps to JPY9,451 as Bain Left High and Dry
(Mostly) Asia-Pac M&A: Agro Kanesho, Nishimoto, Chita Kogyo, Macromill, Silk Logistics, Avarga, MAHB
Last Week in Event SPACE: Seven & I, PA Gooddoctor, Nec Networks, Genscript/Legend, ASM PT, Hanwha
China A50 ETFs Rebalance Preview: One Change to Close Out the Year

HK Connect SOUTHBOUND Flows (To 15 Nov 2024); Tech Bought, High-Div SOEs Sold or Ignored, Again

SOUTHBOUND gross trading activity still high. Net buying very strong. 7 names traded more than US$1bn. Last week I said tech would continue to be bought. It was.
The trend continues to net sales of ETFs and high div SOEs. Net buying is very, very broad-based. Tracker Fund of Hong Kong (2800 HK) is batted around like crazy.
I expect HK-listed tech to continue getting bought. Alibaba, Tencent, Xiaomi, etc are safe havens against Trump tariffs as they don’t compete in the US.

China Healthcare Weekly (Nov.17) – TCM VBP New Updates, CR Boya Completes Acquisition of Green Cross

By Xinyao (Criss) Wang

The new round of national TCM decoction pieces VBP has started. We think the overall price reduction would be relatively mild, and the impact on related TCM enterprises is limited.
The NHSA will vigorously promote the expansion of TCM VBP, which is another challenge for TCM injections. But the impact on exclusive TCM varieties and innovative TCM injections is smaller.
CR Boya has completed the acquisition of 100% equity of Green Cross and has included it in the scope of consolidated financial statements starting from November. Future M&As will continue.

Weekly Deals Digest (17 Nov) – Seven & I, Fuji Soft, Nishimoto, Macromill, CPMC, KEPCO, SF Holding

A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
ECM developments: S.F. Holding (002352 CH) is premarketing an H Share listing to raise US$1.0-1.5 billion, Kansai Electric Power (9503 JP)‘s US$3.5 billion placement.
Event-Driven developments: Seven & I Holdings (3382 JP), Fuji Soft Inc (9749 JP), Nishimoto (9260 JP), Macromill, Inc (3978 JP), Agro Kanesho (4955 JP), Renewable Japan (9522 JP), CPMC.

FXI Rebalance Preview: One Change in December as Shorts Spike

With one trading day left in the review period, we expect one change with China Merchants Securities Co Ltd (H) (6099 HK) replacing Yankuang Energy Group (1171 HK) in December.
Capping will result in selling for Meituan (3690 HK) and buying in Tencent (700 HK) and Alibaba Group Holding (9988 HK).
Short interest has jumped on both stocks, but the increase is far higher in China Merchants Securities Co Ltd (H) (6099 HK) compared to Yankuang Energy Group (1171 HK).

A/H Premium Tracker (To 15 Nov 2024): AH Premia Rise Sharply; Hs Shellacked Vs As In Most Sectors

Huge volumes continue to be traded on the mainland share markets. SOUTHBOUND volumes bounced, and net buying was both large and broad-based.
Stocks in HK and mainland markets fell heavily with HK’s main indices down 6-7% and China’s blue chip indices down 3.3-3.6% (CSI 500 – 4.8%).
Within H/A Pairs, after outperforming the HK/mainland spread for weeks, spreads got shellacked. Worst week in a long time (-3.7%), perhaps on the back of “disappointing” lack of stimulus measures.

Fuji Soft (9749 JP): KKR Bumps to JPY9,451 as Bain Left High and Dry

KKR & Co (KKR US) has secured the Fuji Soft Inc (9749 JP) Board’s unanimous support by bumping its second tender offer to JPY9,451, a JPY1 premium to Bain’s JPY9,450 offer.
The Board is claiming a “fiduciary duty” win as it has secured a higher offer from KKR but paradoxically signalling that it will not negotiate a bump from Bain.
Bain will likely walk rather than try to win the Board’s support by revising terms. At the last close, the gross spread to KKR’s offer is 3.7%.

(Mostly) Asia-Pac M&A: Agro Kanesho, Nishimoto, Chita Kogyo, Macromill, Silk Logistics, Avarga, MAHB

By David Blennerhassett

I tally 48 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
Six new deals this week! TOs for Agro Kanesho (4955 JP), Nishimoto (9260 JP), Chita Kogyo (5993 JP), Macromill (3978 JP). Also Silk Logistics (SLH AU) and Avarga (AVARGA SP).
Key updates took place on: Pacific Smiles (PSQ AU), ASMPT (522 HK), Nec Networks & System Integr (1973 JP), Seven & I (3382 JP), and Malaysia Airports Holdings (MAHB MK).

Last Week in Event SPACE: Seven & I, PA Gooddoctor, Nec Networks, Genscript/Legend, ASM PT, Hanwha

By David Blennerhassett

There are people who’ll take profit in Seven & I (3382 JP) because of path dependency til year-end. It will drag out a while: buy the dips, trim on pops.
Just like in Lufax Holding (6623 HK)‘s special dividend, expect Ping An to boost its holding in Ping An Healthcare and Technology (1833 HK) via the stealthy scrip dividend option.
The landscape for Nec Networks & System Integr (1973 JP) has FULLY changed. The details now matter quite a bit. NEC has two basic choices. Neither are that palatable.

China A50 ETFs Rebalance Preview: One Change to Close Out the Year

The December review will use closing prices from 18 November to determine the list of stocks that will be included into and excluded from the ETFs.
As of the close on 15 November, we see NAURA Technology Group (002371 CH) replacing Huaneng Lancang River Hydropow (600025 CH) in the ETFs.
NAURA Technology has doubled in price this year, while Huaneng Lancang has corrected from its highs and could be deleted from the ETF in just one quarter.

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Nov 17

Daily Brief Macro: Trump Vs. Powell: LET THE GAMES BEGIN and more

By Smartkarma Daily Briefs | Daily Briefs, Macro

In today’s briefing:

Trump Vs. Powell: LET THE GAMES BEGIN

Trump Vs. Powell: LET THE GAMES BEGIN

By David Mudd

Trump and Powell have had an acrimonious relationship since Trump’s first term and that continues today.
Trump’s fiscal policies will create crosscurrents for the US economy and run counter to Powell’s objectives as chairman of the Fed.
Although tariffs can be implemented quickly, they must run concurrently with other policies to restrain their inflationary effects on the US economy. Other policies will take longer to implement.

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Nov 17

Daily Brief Quantitative Analysis: A-H Premium Weekly (Nov 15th):Chalco and more

By Smartkarma Daily Briefs | Daily Briefs, Quantitative Analysis

In today’s briefing:

A-H Premium Weekly (Nov 15th):Chalco, CICC, HUAHONG GROUP, CanSinoBIO
HK Short Interest Weekly: Xpeng, Citic Sec, Anta Sports, HSBC, Mnso
Hong Kong Connect Flows (Nov 15th): Alibaba, Xiaomi, SMIC, Tencent, Ping An Insurance, HKEx, CNOOC

A-H Premium Weekly (Nov 15th):Chalco, CICC, HUAHONG GROUP, CanSinoBIO

By Ke Yan, CFA, FRM

We analyse the changes of A-H premium on 150 stocks over the last week. The average A-H premium was 104.8% as of Nov 15th.
The average A-H premium changed by 6.9ppt week-on-week, led by financials, information technology, consumer discretionary and offset by communication services.
We highlight weekly changes in A-H premium for Chalco, CICC, HUAHONG GROUP, CanSinoBIO.

HK Short Interest Weekly: Xpeng, Citic Sec, Anta Sports, HSBC, Mnso

By Ke Yan, CFA, FRM

We analyzed the latest HK SFC report for aggregate short position as of Nov 8th.
Top short increases and decreases were tabulated for one week and four week period.
We highlight short changes in Xpeng, Citic Sec, Anta Sports, HSBC, Mnso.

Hong Kong Connect Flows (Nov 15th): Alibaba, Xiaomi, SMIC, Tencent, Ping An Insurance, HKEx, CNOOC

By Ke Yan, CFA, FRM

We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of November 15th.
The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.
We highlight flows for Alibaba, Xiaomi, SMIC, Tencent, Ping An Insurance, HKEx, CNOOC.

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Nov 17

Daily Brief ECM: SF Holding Pre-IPO: Three Important Issues for Long-Term Investors to Consider and more

By Smartkarma Daily Briefs | Daily Briefs, ECM

In today’s briefing:

SF Holding Pre-IPO: Three Important Issues for Long-Term Investors to Consider
Pony AI IPO Pricing: The Bottom Of a Range Looks Reasonable After WeRide’s Mixed Debut

SF Holding Pre-IPO: Three Important Issues for Long-Term Investors to Consider

By Daniel Hellberg

SF Holding’s domestic parcel volumes have grown slower than overall market volumes recently; is this strategic, or simply a loss of share?
SF Holding is not closely aligned with any of the large online retail platforms in China; ultimately, is this independence an advantage or a disadvantage?
When will SF Holdings’ varied international operations — and there are a few of them — begin to pull their own weight, in terms of profitability and growth?

Pony AI IPO Pricing: The Bottom Of a Range Looks Reasonable After WeRide’s Mixed Debut

By Andrei Zakharov

Pony AI, a China’s robotaxi operator and self-driving technology company, plans to raise up to $360M in upcoming IPO and concurrent private placements.
Pony AI is expected to IPO next week. The company’s amended F-1 puts the price range per ADS at $11.00-$13.00, implying a market cap of ~$4.2B at the midpoint.
I believe Pony AI may price its IPO at the bottom of a range after WeRide’s mixed debut. IPO valuation suggests a drop from last round valuation of ~$8.5B.

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Nov 17

Daily Brief China: Jiangxi Boya Bio Pharmaceutical, S.F. Holding, Alibaba Group Holding , Yankuang Energy Group, China International Capital Corporation, Tencent, NAURA Technology Group, Pony AI, Bilibili and more

By Smartkarma Daily Briefs | China, Daily Briefs

In today’s briefing:

China Healthcare Weekly (Nov.17) – TCM VBP New Updates, CR Boya Completes Acquisition of Green Cross
SF Holding Pre-IPO: Three Important Issues for Long-Term Investors to Consider
HK Connect SOUTHBOUND Flows (To 15 Nov 2024); Tech Bought, High-Div SOEs Sold or Ignored, Again
FXI Rebalance Preview: One Change in December as Shorts Spike
A/H Premium Tracker (To 15 Nov 2024): AH Premia Rise Sharply; Hs Shellacked Vs As In Most Sectors
[Tencent (700 HK, BUY, TP HK$518) TP Change]: C3Q24 Review: Performance In-Line with Catalysts
China A50 ETFs Rebalance Preview: One Change to Close Out the Year
Pony AI IPO Pricing: The Bottom Of a Range Looks Reasonable After WeRide’s Mixed Debut
[Bilibili (BILI US, BUY, TP US$22) TP Change]: C3Q24 Review: Traffic Growth Bodes Well for Future

China Healthcare Weekly (Nov.17) – TCM VBP New Updates, CR Boya Completes Acquisition of Green Cross

By Xinyao (Criss) Wang

The new round of national TCM decoction pieces VBP has started. We think the overall price reduction would be relatively mild, and the impact on related TCM enterprises is limited.
The NHSA will vigorously promote the expansion of TCM VBP, which is another challenge for TCM injections. But the impact on exclusive TCM varieties and innovative TCM injections is smaller.
CR Boya has completed the acquisition of 100% equity of Green Cross and has included it in the scope of consolidated financial statements starting from November. Future M&As will continue.

SF Holding Pre-IPO: Three Important Issues for Long-Term Investors to Consider

By Daniel Hellberg

SF Holding’s domestic parcel volumes have grown slower than overall market volumes recently; is this strategic, or simply a loss of share?
SF Holding is not closely aligned with any of the large online retail platforms in China; ultimately, is this independence an advantage or a disadvantage?
When will SF Holdings’ varied international operations — and there are a few of them — begin to pull their own weight, in terms of profitability and growth?

HK Connect SOUTHBOUND Flows (To 15 Nov 2024); Tech Bought, High-Div SOEs Sold or Ignored, Again

SOUTHBOUND gross trading activity still high. Net buying very strong. 7 names traded more than US$1bn. Last week I said tech would continue to be bought. It was.
The trend continues to net sales of ETFs and high div SOEs. Net buying is very, very broad-based. Tracker Fund of Hong Kong (2800 HK) is batted around like crazy.
I expect HK-listed tech to continue getting bought. Alibaba, Tencent, Xiaomi, etc are safe havens against Trump tariffs as they don’t compete in the US.

FXI Rebalance Preview: One Change in December as Shorts Spike

With one trading day left in the review period, we expect one change with China Merchants Securities Co Ltd (H) (6099 HK) replacing Yankuang Energy Group (1171 HK) in December.
Capping will result in selling for Meituan (3690 HK) and buying in Tencent (700 HK) and Alibaba Group Holding (9988 HK).
Short interest has jumped on both stocks, but the increase is far higher in China Merchants Securities Co Ltd (H) (6099 HK) compared to Yankuang Energy Group (1171 HK).

A/H Premium Tracker (To 15 Nov 2024): AH Premia Rise Sharply; Hs Shellacked Vs As In Most Sectors

Huge volumes continue to be traded on the mainland share markets. SOUTHBOUND volumes bounced, and net buying was both large and broad-based.
Stocks in HK and mainland markets fell heavily with HK’s main indices down 6-7% and China’s blue chip indices down 3.3-3.6% (CSI 500 – 4.8%).
Within H/A Pairs, after outperforming the HK/mainland spread for weeks, spreads got shellacked. Worst week in a long time (-3.7%), perhaps on the back of “disappointing” lack of stimulus measures.

[Tencent (700 HK, BUY, TP HK$518) TP Change]: C3Q24 Review: Performance In-Line with Catalysts

By Ying Pan

Tencent reported C3Q24 revenue, IFRS operating profit, and IFRS net income in-line, in-line, 11% vs. our estimates and in-line, in-line, 18% vs. consensus.
The bright spot is fintech transaction volume grew 10% YoY showing gain in market share, which coupled with rebound in consumption since October should rive recovery.
We raise TP by 2% to HK$518. Tencent is still our TOP PICK in an uncertain geopolitical environment with an upswing fundamental story.

China A50 ETFs Rebalance Preview: One Change to Close Out the Year